Yes B&N, cut the Nook loose

FORTUNE — Barnes & Noble is now in full retreat. In announcing that it might unload its Nook e-reader business, the company is admitting that it can’t finance the future of the book business while it’s still lashed to the past of the book business.

Or, more precisely, it could finance the future of the book business if only investors would look the other way for a few years and let the company lose lots of money while it did so. But of course investors won’t do that. Yesterday’s announcement that it is exploring “strategic options” for the Nook business was meant to appease those investors. In the short term, at least, that isn’t enough: B&N BKS shares were down about 20 percent in afternoon trading Thursday thanks to the company’s revelation that its losses for fiscal 2012, which ends April 30, might be as high as $1.40 a share. Its previous estimate was just 50 cents a share, and analysts had forecast an average of 59 cents, according to Bloomberg.

Numbers like that tend to make executives reach for something else — anything else — to announce at the same time. Vague plans to unload the Nook fit the bill. So investors soon might not have to worry so much about the Nook vacuuming up B&N’s profits. All they’ll have to worry about is that they own stock in a dying business — but one that still might yield them some returns.

Sales of the Nook are pretty good on the whole. Just not good enough, fast enough, for B&N to keep the product in house. Sales of the Nook Tablet were up 70% over the holiday season, B&N said. But sales of the lower-end Simple Touch fell short of the company’s hopes. B&N put most of the blame for its lowered guidance on soft sales of the Simple Touch, as well as the investments it’s been making in the Nook line.

B&N “overanticipated the growth in consumer demand for single purpose black-and-white reading devices this holiday,” the company said in a statement. Or, perhaps it underanticipated the strength of the competition Amazon’s Kindle Touch AMZN would pose, as well as the level of cannibalization of the Simple Touch by B&N’s own the tablet device.

Being released from B&N is the best thing for the Nook itself. B&N CEO William Lynch is right when he says the product line is valuable and a spinoff or sale might be the best way to “unlock” that value. A new set of investors and managers could give the Nook not only the money it needs, but also the focus that B&N can’t give it.

B&N says it’s just beginning to explore its options and is in discussions with “strategic partners.” One possibility is that Liberty Media, which invested $204 million in B&N last year, could take the Nook business. The least likely possibility would be a public spin-off; it’s hard to imagine the Nook as a separate company on its own. But it would still be better than staying with B&N, where it represents not so much the future of the book business as “a giant sinkhole of losses.“